Photronics Reports Full Year and Fourth Quarter Fiscal 2021 Results
December 08 2021 - 6:00AM
Photronics, Inc. (NASDAQ:PLAB), a worldwide leader in photomask
technologies and solutions, today reported financial results for
its full year and fourth quarter fiscal 2021 ended October 31,
2021.
“Photronics achieved a fourth consecutive year
of record revenue, as demand for our design-driven products
accelerated and we fully ramped new flat panel display capacity,”
said Peter Kirlin, chief executive officer. “We made strategic
investments in 2021 that have positioned us to achieve organic
growth as market trends such as the increase in demand from Asia
foundries and the adoption of advanced display technologies in
mobile applications have driven the market higher.”
Full Year 2021 Results
- Revenue of $663.8 million was a
record for the fourth consecutive year, up 9% compared with
2020
- Net income attributable to
Photronics, Inc. shareholders was $55.4 million, or $0.89 per
diluted share
- Cash provided by operating
activities was $150.8 million, capex was $103.5 million, share
repurchases were $48.3 million, and ending cash balance was $276.7
million
Fourth Quarter 2021 Results
- Revenue was $181.3 million, the
third consecutive quarterly record, up 6% sequentially and 21%
year-over-year
- Net income attributable to
Photronics, Inc. shareholders was $19.8 million ($0.33 per diluted
share), compared with $17.1 million ($0.28 per diluted share) for
the third quarter of 2021 and $6.5 million ($0.10 per diluted
share) for the fourth quarter of 2020
Full year integrated circuit (IC) revenue was
$460.2 million, up 10% compared with last year; flat panel display
(FPD) revenue was $203.6 million, 6% over the same quarter last
year.
IC revenue in the fourth quarter was $125.4
million, up 7% sequentially and 18% compared with the fourth
quarter of last year; FPD revenue was $55.8 million, up 6% over
last quarter and 29% over the same period last year.
“Past investments in targeted technologies are
paying off, as margin expansion is accompanying top-line growth,”
added Kirlin. “We are generating gross and operating margins
already at the high-end of the three-year target model we presented
last year, and our strong cash flow enables us to invest in the
business while we also return cash to shareholders as part of our
disciplined capital allocation. With strong end market demand,
solid balance sheet, broad geographic presence, and a team with a
proven track record, we are excited about our future and optimistic
we can deliver on our long-term target model objectives.”
First Quarter 2022 Guidance
For the first quarter of 2022, Photronics
expects revenue to be between $178 million and $186 million, and
net income attributable to Photronics, Inc. shareholders to be
between $0.27 and $0.34 per diluted share.
Conference Call
A conference call to discuss these results is
scheduled for 8:30 a.m. Eastern time on Wednesday, December 8,
2021. The call can be accessed by logging onto Photronics' website
at www.photronics.com. The live dial-in number is (877) 377-7095 or
(408) 774-4601 outside of the United States and Canada. The call
will be archived on Photronics’ website.
About Photronics
Photronics is a leading worldwide manufacturer
of integrated circuit (IC) and flat panel display (FPD) photomasks.
High precision quartz plates that contain microscopic images of
electronic circuits, photomasks are a key element in the IC and FPD
manufacturing process. Founded in 1969, Photronics has been a
trusted photomask supplier for over 50 years. As of October
31, 2021, the company had 1,728 employees. The company operates 11
strategically located manufacturing facilities in Asia, Europe, and
North America. Additional information on the company can be
accessed at www.photronics.com.
Forward-Looking Statements
Certain statements in this press release
constitute “forward-looking statements” within the meaning of the
Private Securities Litigation Reform Act of 1995. The Private
Securities Litigation Reform Act of 1995 provides a “safe harbor”
for forward-looking statements made by or on behalf of the company
and its subsidiaries. Such forward-looking statements involve known
and unknown risks, uncertainties and other factors which may cause
actual results, performance or achievements of Photronics to be
materially different from any future results, performance or
achievements expressed or implied by such forward-looking
statements. Statements preceded by, followed by or that otherwise
include the words “believes,” “expects,” “anticipates,” “intends,”
“projects,” “estimates,” “plans,” “may increase,” “may fluctuate,”
“will,” “should,” “would,” “may” and “could” or similar words or
expressions are generally forward-looking in nature and not
historical facts. Any statements that refer to outlook,
expectations or other characterizations of future events,
circumstances or results are also forward-looking statements.
Important risks, assumptions and other important factors that could
cause future results to differ materially from those expressed in
the forward-looking statements are specified in Photronics’ Annual
and Quarterly filings with the Securities and Exchange Commission
under headings such as “Forward-Looking Statements”, “Risk Factors”
and “Management’s Discussion and Analysis of Financial Condition
and Results of Operations” and in other filings and furnishings
made by Photronics with the Securities and Exchange Commission from
time to time. These risks and uncertainties include, but are not
limited to, the current pandemic and future recurrences and other
developments with respect thereto, governmental responses to the
pandemic and related matters, changes in end markets resulting
therefrom, changes in investment, tax, trade, exchange and other
laws and regulations, compliance with local, State and Federal
laws, rules and regulations including, but not limited to, import
and export controls, tariffs and penalties, fines and violations
related thereto, as well as economic, competitive, legal,
governmental, political, monetary and fiscal policy, and
technological factors and decisions we may make in the future
regarding our business, capital structure and other matters.
Photronics undertakes no obligation to release publicly any
revisions to any forward-looking statements or, except as required
to be disclosed in filings or furnishings with the Securities and
Exchange Commission, to report events or to report the occurrence
of unanticipated events. There is no assurance that Photronics’
expectations will be realized.
PHOTRONICS, INC. |
Condensed Consolidated Statements of Income |
(in thousands, except per share amounts) |
(Unaudited) |
|
|
|
|
|
|
|
Three Months Ended |
|
Year Ended |
|
|
October 31, |
|
August 1, |
|
October 31, |
|
October 31, |
|
October 31, |
|
|
|
2021 |
|
|
|
2021 |
|
|
|
2020 |
|
|
|
2021 |
|
|
|
2020 |
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
$ |
181,288 |
|
|
$ |
170,643 |
|
|
$ |
149,286 |
|
|
$ |
663,761 |
|
|
$ |
609,691 |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold |
|
|
129,347 |
|
|
|
125,318 |
|
|
|
117,401 |
|
|
|
496,717 |
|
|
|
475,037 |
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit |
|
|
51,941 |
|
|
|
45,325 |
|
|
|
31,885 |
|
|
|
167,044 |
|
|
|
134,654 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative |
|
14,322 |
|
|
|
15,083 |
|
|
|
12,790 |
|
|
|
57,525 |
|
|
|
53,582 |
|
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
|
4,100 |
|
|
|
5,305 |
|
|
|
4,110 |
|
|
|
18,490 |
|
|
|
17,144 |
|
|
|
|
|
|
|
|
|
|
|
|
Total Operating Expenses |
|
|
18,422 |
|
|
|
20,388 |
|
|
|
16,900 |
|
|
|
76,015 |
|
|
|
70,726 |
|
|
|
|
|
|
|
|
|
|
|
|
Other operating income, net |
|
|
- |
|
|
|
3,525 |
|
|
|
- |
|
|
|
3,525 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income |
|
|
33,519 |
|
|
|
28,462 |
|
|
|
14,985 |
|
|
|
94,554 |
|
|
|
63,928 |
|
|
|
|
|
|
|
|
|
|
|
|
Non-operating income (expense), net |
|
3,809 |
|
|
|
3,735 |
|
|
|
(2,937 |
) |
|
|
7,452 |
|
|
|
(2,327 |
) |
|
|
|
|
|
|
|
|
|
|
|
Income Before Income Tax Provision |
|
37,328 |
|
|
|
32,197 |
|
|
|
12,048 |
|
|
|
102,006 |
|
|
|
61,601 |
|
|
|
|
|
|
|
|
|
|
|
|
Income tax provision |
|
|
8,697 |
|
|
|
7,842 |
|
|
|
3,469 |
|
|
|
23,190 |
|
|
|
21,258 |
|
|
|
|
|
|
|
|
|
|
|
|
Net Income |
|
|
28,631 |
|
|
|
24,355 |
|
|
|
8,579 |
|
|
|
78,816 |
|
|
|
40,343 |
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to noncontrolling interests |
|
8,820 |
|
|
|
7,279 |
|
|
|
2,119 |
|
|
|
23,367 |
|
|
|
6,523 |
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to Photronics, Inc. shareholders |
$ |
19,811 |
|
|
$ |
17,076 |
|
|
$ |
6,460 |
|
|
$ |
55,449 |
|
|
$ |
33,820 |
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.33 |
|
|
$ |
0.28 |
|
|
$ |
0.10 |
|
|
$ |
0.90 |
|
|
$ |
0.52 |
|
|
|
|
|
|
|
|
|
|
|
|
Diluted |
|
$ |
0.33 |
|
|
$ |
0.28 |
|
|
$ |
0.10 |
|
|
$ |
0.89 |
|
|
$ |
0.52 |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average number of common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
60,216 |
|
|
|
60,884 |
|
|
|
64,193 |
|
|
|
61,407 |
|
|
|
64,866 |
|
|
|
|
|
|
|
|
|
|
|
|
Diluted |
|
|
60,908 |
|
|
|
61,515 |
|
|
|
64,768 |
|
|
|
61,999 |
|
|
|
65,470 |
|
|
|
|
|
|
|
|
|
|
|
|
|
PHOTRONICS, INC. |
Condensed Consolidated Balance Sheets |
(in thousands) |
(Unaudited) |
|
|
|
|
|
|
|
October 31, |
|
October 31, |
|
|
|
2021 |
|
|
|
2020 |
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
|
$ |
276,670 |
|
|
$ |
278,665 |
|
Accounts receivable |
|
|
174,447 |
|
|
|
134,470 |
|
Inventories |
|
|
55,249 |
|
|
|
57,269 |
|
Other current assets |
|
|
44,250 |
|
|
|
29,735 |
|
|
|
|
|
|
Total current assets |
|
|
550,616 |
|
|
|
500,139 |
|
|
|
|
|
|
Property, plant and equipment, net |
|
696,553 |
|
|
|
631,475 |
|
Intangible assets, net |
|
|
774 |
|
|
|
3,437 |
|
Other assets |
|
|
46,259 |
|
|
|
53,131 |
|
|
|
|
|
|
Total assets |
|
$ |
1,294,202 |
|
|
$ |
1,188,182 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Equity |
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
Debt |
|
$ |
22,248 |
|
|
$ |
13,678 |
|
Accounts payable and accrued liabilities |
|
153,900 |
|
|
|
129,261 |
|
|
|
|
|
|
Total current liabilities |
|
|
176,148 |
|
|
|
142,939 |
|
|
|
|
|
|
Long-term debt |
|
|
89,446 |
|
|
|
54,980 |
|
Other liabilities |
|
|
28,046 |
|
|
|
27,997 |
|
|
|
|
|
|
Photronics, Inc. shareholders' equity |
|
823,692 |
|
|
|
804,962 |
|
Noncontrolling interests |
|
|
176,870 |
|
|
|
157,304 |
|
Total equity |
|
|
1,000,562 |
|
|
|
962,266 |
|
|
|
|
|
|
Total liabilities and equity |
|
$ |
1,294,202 |
|
|
$ |
1,188,182 |
|
|
|
|
|
|
|
PHOTRONICS, INC. |
Condensed Consolidated Statements of Cash
Flows |
(in thousands) |
(Unaudited) |
|
|
|
|
|
|
|
Year Ended |
|
|
October 31, |
|
October 31, |
|
|
|
2021 |
|
|
|
2020 |
|
|
|
|
|
|
Cash flows from operating activities: |
|
|
|
|
Net income |
|
$ |
78,816 |
|
|
$ |
40,343 |
|
Adjustments to reconcile net income to net cash |
|
|
|
provided by operating activities: |
|
|
|
|
Depreciation and amortization |
|
|
90,396 |
|
|
|
93,814 |
|
Share-based compensation |
|
|
5,348 |
|
|
|
4,927 |
|
Changes in operating assets, liabilities and other |
|
(23,788 |
) |
|
|
3,962 |
|
|
|
|
|
|
Net cash provided by operating activities |
|
|
150,772 |
|
|
|
143,046 |
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
Purchases of property, plant and equipment |
|
(109,099 |
) |
|
|
(70,815 |
) |
Government incentives |
|
|
5,775 |
|
|
|
5,263 |
|
Purchases of intangible assets |
|
|
(170 |
) |
|
|
(159 |
) |
|
|
|
|
|
Net cash used in investing activities |
|
|
(103,494 |
) |
|
|
(65,711 |
) |
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
Proceeds from long-term debt |
|
|
20,858 |
|
|
|
20,340 |
|
Purchases of treasury stock |
|
|
(48,250 |
) |
|
|
(34,394 |
) |
Repayments of debt |
|
|
(20,352 |
) |
|
|
(7,392 |
) |
Dividends paid to noncontrolling interests |
|
(9,597 |
) |
|
|
(16,151 |
) |
Proceeds from share-based arrangements |
|
3,874 |
|
|
|
4,239 |
|
Contribution from noncontrolling interest |
|
- |
|
|
|
17,596 |
|
Net settlements of restricted stock awards |
|
(436 |
) |
|
|
(248 |
) |
|
|
|
|
|
Net cash used in financing activities |
|
|
(53,903 |
) |
|
|
(16,010 |
) |
|
|
|
|
|
Effect of exchange rate changes on cash, cash equivalents, and
restricted cash |
|
4,703 |
|
|
|
10,986 |
|
|
|
|
|
|
Net (decrease) increase in cash, cash equivalents, and restricted
cash |
|
(1,922 |
) |
|
|
72,311 |
|
Cash, cash equivalents, and restricted cash, beginning of
period |
|
281,602 |
|
|
|
209,291 |
|
|
|
|
|
|
Cash, cash equivalents, and restricted cash, end of period |
$ |
279,680 |
|
|
$ |
281,602 |
|
|
|
|
|
|
For Further Information:John P.
JordanExecutive Vice President &
CFO203.740.5671jjordan@photronics.com
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